Mark Cuban, owner of the billionaire and Mavericks, has opened an online pharmacy that offers prescription drugs at lower prices.
According to a press release from the Mark Cuban Cost Plus Drug Company, their strategy behind offering low prices to consumers is to “avoid intermediaries and exorbitant markup.”
In its press release, the company pointed out medicines that could save a lot of money on the site. For example, imatinib, a drug used to treat leukemia, retails for $ 9,657 per month and $ 120 per month with a voucher, but MCCPDC offers it for $ 47 per month, according to a press release.
According to MCCPDC, other conservative medications include mesalamine, a treatment for ulcerative colitis, and colchicine, a treatment for gout.
The company’s goal is to bring transparency to the drug price market and show consumers the wholesale price behind the drug.
More specifically, MCCPDC eliminates fees paid to pharmacists, pharmacies, and pharmacy benefit managers who negotiate contracts with various stakeholders in the medical field.
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According to the Commonwealth Fund, a private foundation specializing in health care research and policy, pharmacy benefit managers in particular are scrutinizing their role in the distribution of prescription drugs. A pharmacy benefit manager is a company that stands in the middle of a pharmacy, a pharmaceutical company, and a health insurance company.
First, they use the power of wholesale to negotiate rebates with pharmaceutical companies. Second, they pass those rebates to the health insurance company and receive payment from the health insurance company. Third, they pay the pharmacy to dispense prescription drugs to patients.
However, according to the Federal Fund, there is little transparency as to how much these rebate pharmacy benefit managers will give, and rebate incentives allow these managers to buy expensive drugs rather than cheaper, more common drugs. They may like it and may pass on high costs to consumers.
Alex Oshmyansky, CEO of MCCPD, said in a press release: “The only way to ensure affordability is vertical integration.”
However, if you do not have a pharmacy benefit manager, all purchases on the site must be made in cash and cannot be covered by insurance. MCCPDC points out that even without insurance, the price is cheaper than many deductibles and out-of-pocket costs.
According to Joseph Antos, a Wilson H. Taylor scholar in Healthcare and Retirement Policy at the American Enterprise Institute, whether prices are cheaper depends heavily on a particular drug.
“There is nothing unified in his market. It’s very difficult to predict if a reduction in out-of-pocket costs will be sufficient,” Antos said.
Antos points out that Cuba was not the first to enter the market and is fiercely competing with competitors like GoodRx and pharmacies that have existing relationships with patients.
The success of a Cuban company depends on how effective it is in reaching patients and whether they are willing to switch from existing providers, Antos says.
Michelle Shen is USA TODAY’s Money & Tech Digital Reporter. You can contact her @ michelle_shen10 on Twitter.
